The Voice - Consumer's Voice

Do I really owe them?

Hello Mr Richard. I am inboxing this regarding to the issue I have with a furniture store in Masunga. I took a bed from them on instalment when I was still a Special Constable and unfortunately I was admitted at one of the tertiaries where allowance was P150 so I asked them to take the bed since paying it off would be a difficult thing. Yes they did not give me any headache. They took the bed. I only learnt after 10 years I still have my name in their system and I'm still owing a lot of money. Do I clear the debt and get nothing or I clear they give the bed back. Help I am clueless!

Yet again a story that shows how horrible hire purchase can be and how badly people understand how it works. I don't blame consumers for this entirely, I blame the stores that sell things on hire purchase for not explaining it to their victims. Sorry, I mean to say 'customers'.

The first and most important thing to understand about hire purchase is the name. It's called 'hire' purchase because you are hiring the goods, not buying them. You only get to own the items you're hiring when you've paid the final instalment. Only then is that bed your property. Up to that day, the bed still belonged to the store and they're entitled to come and repossess their property if you ever fall behind with your instalments.

The second thing to understand is that even if the bed is repossessed and whether that was their idea or yours, you still owe them money. You agreed to hire the bed over a two-year period and you owe them the full two years of money minus any instalments you've already paid and any money they might get when they auction your bed. Remember that the bed is now second-hand and used and not worth the original purchase price and when they sell it they'll probably only get a small fraction of the outstanding value of the bed. When you add on the various penalties, debt collection charges and interest, you can easily end up owing more than the amount you owed when you still had the bed.

The final lesson today is that debt doesn't go away if you ignore it. The store or their debt collectors really should have kept you updated on the debt you owed and I suspect you'll be shocked when you see the total bill now. However, the sooner you speak to them the better. The debt isn't going to get any smaller the longer you wait.

Where's my insurance?

I have a problem here concerning hire purchase. I bought a TV set and a microwave and defaulted a few months and the TV accidentally broke the screen and I was required to do a police report and bring a police affidavit for processing of insurance claim. I was called and told to clear off the arrears from my defaults before I could be assisted and I complied but now it's becoming a problem for them to assist me though I cleared arrears and on a good standing. Please advise and assist accordingly.

Another, similar story illustrating how hire purchase can go wrong. Another lesson about hire purchase is that while you'll often be offered insurance against the goods being stolen or damaged you really need to read the small print in the agreement you sign. You must check to see what exactly the policy covers and when. For instance, it's normal for the policy not to cover you if you're behind with your instalments, like in your case.

I contacted the Country Manager for the store and he confirmed that if your account is up to date they can process your claim but also mentioned that this needs to be done within 60 days of the damage occurring. If it's after that period then they might only consider the claim, there's no guarantee.

Update: I heard from the customer that the store lost his original police complaint and they need a new one. I hope this means they accept some responsibility for the delay and encourage their insurance people to do the right thing?

The Voice - Consumer's Voice

Will he fix my TV again?

I requested for a TV repairs service from a gentleman who advertises on Facebook.

On 27th March he came to my house and fixed the TV around 1 pm and I made P600 payment for the service. Same day in the evening around 6 pm the TV went black and back to the state it was before it was fixed. Basically it only worked for less than 6 hours. I remember clearly asking after it was fixed how long I expected it to operate before I experienced the same problem and he said I shouldn't be worried by having the problem anytime soon.

I called the gentleman the same day it shut down after he did the repairs and he agreed that he will come the following day to come and attend to it. Ever since that day we have been going back and forth him telling me how busy he is all of a sudden and never comes through whenever we make appointments. I even suggested to go to his home so that he can attend it there and he agreed to meet only for him to not respond to my calls and texts when I arrived at the agreed place.. He is now ignoring my calls and texts and I have tried to plead with him to bring back my money since he failed to fix the TV as per the agreement and he said he does not have money to pay me. Please help me on how I could be assisted in getting back my hard earned cash from this gentleman as I feel robbed.

I think you have a right to feel robbed. You paid good money for a job to be done and the job clearly wasn't done properly. You have a right to get your TV working properly or to get your money back.

Section 14 (1) (b) of the Consumer Protection Act says that when a supplier:

"undertakes to perform any services for or on behalf of a consumer, the consumer has a right to … performance of the services in a manner and quality that consumers are reasonably entitled to expect". 

Surely it's quite simple? If you pay someone to fix your TV, then your TV should work. 

The Act goes on to say that if a supplier fails to perform a service adequately, they must either:

"remedy any defect in the quality of the services"

or

"refund the consumer a reasonable portion of the price paid for the services performed and goods supplied, having regard to the extent of the failure".

I contacted the TV repair guy and he told me he has transport problems but he promises that he'll come and fix your TV. Let's hope it works this time.

Is it true?

I need your assistance. I bought goods on hire purchase in 2019. At the end of the first lockdown I went to them and told them I can't afford to pay them. They said I should keep on trying to find the instalment money but I failed to find it. I went to them the second time they said when they take the goods because of failure to pay, I will continue paying even after they take them. I am asking is how fair is this. Is there truth in it?

Regular readers of The Voice will know already what I'm going to say because we've covered this many times before. Unfortunately, what you've been told is 100% correct.

If you fail to keep up the payments on a hire purchase agreement the store is entitled to repossess the item you bought. They will then sell it and deduct the money they get from the balance you owe them. However, it's important to remember that the repossessed item is now second-hand, perhaps not in the best condition and they'll sell it to the first person who offers them some money. The amount they get will almost certainly be only a fraction of what you still owe. When you add penalties, interest and debt collection and legal costs you can easily end up owing MORE than you did before the repossession.

What's worse is that you'll then owe money for something you don't even possess any longer. I suggest that you contact the store again and try to negotiate a repayment plan that you can afford.

The lesson is simple. Please do your best to avoid buying things on any form of credit if you can buy it for cash.

The Voice - Consumer's Voice

Must I pay?

Good afternoon Mr Harriman, I would like your opinion or possible help with the following Issue. I was involved in an accident some time ago. No one injured. Yes eventually I was charged with the usual driving a vehicle without due attention. Now the car I was driving is not insured but the other was insured. So the lady opted to use her insurance to cover the cost of repair. Now after maybe more than a year, I have received a demand letter from the insurance demanding me to pay all costs of the repair which is P27,000.

Is this lawful? What is the purpose of insurance if after paying premiums the insurance company demand all costs from the offender? I will share the demand letter as directed by your response. Thank you always for your help. 

Unfortunately, this is exactly what happens when you don't have vehicle insurance. It doesn't matter whether the other person has insurance or not, as the offender, you pay the bills. 

The key issue here is that the other lady was paying for a vehicle insurance policy and that policy protects her, not you. She was paying her insurance company to take the financial risk on her behalf so if there's an accident they pay her bills and she doesn't suffer financially.

But neither should the insurance company pay the bills if it wasn't their client who caused the accident. They'll do their best to recover the money they spent compensating their client and the person they'll chase for that money is you. You were the one who caused the accident and your admission of guilt or conviction for driving without due care and attention is all the evidence they need that you're the guilty party.

The simple lesson is this. Insurance benefits the person paying for it and nobody else. That's why every vehicle owner needs it. This might seem hard to believe but you were lucky only to cause damage costing P27,000. I've heard of cases where people caused crashes that completely destroyed another vehicle and were faced with bills of over P500,000. If you'd had a third-party vehicle insurance policy your insurance company would have paid this bill for you.

I suggest you talk to the insurance company and negotiate a repayment plan you can afford because insurance companies don't forgive debts like this.

I also suggest you shop around for a third-party vehicle insurance policy so that if this happens again, you might be better prepared.

What is insurance?

There is such an enormous lack of understanding about insurance, how it works and who it benefits. It's worth spending a moment to understand what it is.

I found a nice quote on Wikipedia that said that insurance "is something people buy to protect themselves from losing money". It went on to say that consumers "who buy insurance pay a premium (often paid every month) and promise to be careful". In exchange for this, Wikipedia explains, "if something bad happens to the person or thing that is insured, the company that sold the insurance will pay the money back. However, there are some times when the company will not have to pay the money back, such as if the person was not careful."

These policies can cover a wide range of things, including property such as our house and belongings, our vehicles and even the vehicles belonging to other people that might be damaged when there's a disaster. They can also cover our lives and those of our loved ones and even our health. It can cover the health of our employees and the people who visit our offices. In all of these cases, if something bad happens that costs money, the insurance company will pay the costs instead of the policyholder.

However, it's very important to carefully read any policy you consider and make sure you understand exactly how it works. For instance some vehicle insurance policies don't cover you if you are charged and convicted or you admit guilt following an incident. Most life insurance policies won't cover you if you engage in dangerous sports or activities.

The commonest argument I hear against having insurance is that it's expensive. Well, firstly, it's NOT that expensive and it's sometimes a LOT cheaper than NOT having it.

The Voice - Consumer's Voice

Can I return it?

Can you help me? I bought a fluffy mat and I paid P1100. I had bought another one at P1200 before this one and a fluffy blanket, so I negotiated to P1100. But It's not the same as the one I bought first. It's low quality and now they can't take it and refund me, I don't know their offices coz they claim to be mobile. They don't take my calls. It's been 3 months since I bought the mat. I Whatsapp and call them every day. I have run out of options coz they don't even take my office call since they established its me calling them.

So I have been calling them to get it so that they can refund me but they not taking my calls after they agreed to collect it.

I used to be dismissive of many businesses that didn't have offices and that are 'mobile' but that's changed completely in the last few years. In fact I'm now really supportive of start-up businesses that operate from home or have distributed workforces. That obviously works for technology businesses but it's increasingly how call centers and the service industry operate. And then came Covid and that forced almost everyone to think carefully about they run their business. Yes, we still need checkout workers in supermarkets but even that's changing now that so many of them offer deliveries. So in 2021 we can expect to see more and more companies being 'mobile'.

But that doesn't change their obligation, as a supplier of goods, to do so as required by the Consumer Protection Act. Section 15 (1) of the Act says that a consumer "has the right to receive goods which are of good quality, in good working order and free of defects". You have the good luck to have previously bought the same item from this supplier so you know how good the products can be and can spot when the later goods aren't as good.

I contacted the supplier and told them that you'd been in touch. Let's see if they want to talk now?

How do I know if someone is trying to scam me?

The last year has seen a dramatic increase in the number of scams that are trying to exploit our ignorance and steal our money. Almost everyone on Facebook will have seen invitations to "invest" in Bitcoin, forex trading or binary options. All of them are scams. All of them want your money.

Here are some tips on how to spot these scams and how you can avoid falling victim to them.

The first question you should always ask yourself is why someone wants you to join their scheme. What's in it for them? Why would they want someone else to make money alongside them? Surely anyone would keep a money-making scheme to themselves rather than sharing the money with others, in particular a stranger?

The reason is very simple. They want you to join their scheme because they want to make money FROM you, not WITH you. They make money from recruiting new victims, not from any genuine investment.

Another clue it's a scam is if the people asking you to join or invest are shy about who and where they are. You should always ask these people to say exactly where they are and then demand they show themselves. Insist on a video call. Insist on hearing their voices. One of the scammers I recently spoke to claimed to be a successful businessman in the USA but was very reluctant to send me either a voice note or appear on video. I eventually persuaded him to speak on the phone and guess what, his accent was much more West African than American. The sound of chickens in the background was also not quite right for the multi-millionaire he claimed to be.

The most important clue is the remarkable claims these scammers always make. I've recently seen people claiming that their scheme can increase an "investment" of $350 to $3,500 in just a week. That's an impossible 1,000% return in a week. There's no investment of any sort that can offer returns like that. Others talk about daily returns or 2-3% or more. That's per day, not per year.

Anyone who makes claims like these is a liar and can't be trusted. Please help us by spreading the word to everyone you know so they fall victim to these scams.